Hope for Setanta insurance customers

Consumers and small businesses left out of pocket following the collapse of Setanta Insurance will be able to claim back part of their premiums if they paid by credit card.

Mastercard has confirmed that customers who used their credit cards to purchase insurance premiums with Setanta Insurance are entitled to claim back a portion of the amount paid.

Some 75,000 Irish consumers have been left uninsured after the Malta-based parent company of Setanta Insurance went into liquidation, many believing they lost all of the money they handed over when they paid for 12 months’ cover up front.

A spokesperson for Mastercard confirmed that if a customer had used their credit card to pay for the insurance than they would be able to claim back a portion of the money they paid out.

“Mastercard rules determine liabilities between issuers and acquirers. An issuer will be allowed to charge back a transaction or a portion of the transaction if the services paid for are not provided or are only partially provided. For example, a cardholder could claim that he/she paid a premium for a year’s insurance coverage and only received five months’ coverage. The chargeback amount would therefore be 7/12 of the total transaction amount,” the spokesperson said.

This means that the amount of money that a Setanta customer would be entitled to claim is proportional to the period left to run on their premium.

CEO of the Consumer Association of Ireland, Dermott Jewell, said that due to a quirk in Irish law, all that customers needed to do was to contact their credit card company and provide proof of payment and the credit card company will have to try and reclaim the money from either the broker or Setanta.

Section 14 of the Sale of Goods Act says that a credit card company is liable for the breach of any contract of sale.

“Once the credit card company have acknowledged that there is an entitlement, all the consumer has to do is give them proof of sale and then the credit card company will have to handle the rest,” he said.